Chapter 1:
Introduction to Project
Management
adopted from PMI’s PMBOK 2000 and
Textbook : Information Technology Project Management
(author : Dr. Kathy Schwalbe)
Chapter 1
1
Contents
•
•
•
•
•
•
•
Project and project management definition
Motivation of studying PM
Advantages of using formal PM
Triple Constraint of PM
Project Management Framework
9 Project Management Knowledge Areas
Project Management Profession
Chapter 1
2
What is a Project?
• A project is a temporary endeavor
undertaken to accomplish a unique purpose
• Attributes of projects
–
–
–
–
–
unique purpose
temporary
require resources, often from various areas
should have a primary sponsor and/or customer
involve uncertainty
Chapter 1
3
Examples of IT Projects
• Northwest Airlines developed a new reservation
system called ResNet (see chapters 1116)
• Many organizations upgrade hardware, software,
and networks via projects (see chapter 5 opening
and closing case)
• Organizations develop new software or enhance
existing systems to perform many business
functions (see examples throughout the text)
• Note: “IT projects” refers to projects involving
hardware, software, and networks
Chapter 1
4
Motivation for Studying Information
Technology (IT) Project Management
• IT Projects have a terrible track record
– A 1995 Standish Group study (CHAOS) found that
only 16.2% of IT projects were successful and over
31% were canceled before completion, costing over
$81 B in the U.S. alone
• The need for IT projects keeps increasing
– In 1998, corporate America issued 200,000 newstart
application development projects
– In 2000, there were 300,000 new IT projects, and
– In 2001, over 500,000 new IT projects were started
Chapter 1
5
Advantages of Using Formal
Project Management
• Better control of financial, physical, and human
resources
• Improved customer relations
• Shorter development times
• Lower costs
• Higher quality and increased reliability
• Higher profit margins
• Improved productivity
• Better internal coordination
• Higher worker morale
Chapter 1
6
The Triple Constraint
• Every project is constrained in different
ways by its
– Scope goals: What is the project trying to
accomplish?
– Time goals: How long should it take to
complete?
– Cost goals: What should it cost?
• It is the project manager’s duty to balance
these three often competing goals
Chapter 1
7
Figure 11. The Triple Constraint of
Project Management
Chapter 1
8
Problems of poor project management
• The 2001 Standish Group Report Showed Decided
Improvement in IT Project Success Rates From the 1995
Study
• Time overruns significantly decreased to 63% compared
to 222%
• Cost overruns were down to 45% compared to 189%
• Required features and functions were up to 67%
compared to 61%
• 78,000 U.S. projects were successful compared to 28,000
• 28% of IT projects succeeded compared to 16%
Chapter 1
9
Why the Improvements?
"The reasons for the increase in
successful projects vary. First, the
average cost of a project has been
more than cut in half. Better tools
have been created to monitor and
control progress and better skilled project
managers with better management processes
are being used. The fact that there are processes
is significant in itself.“*
The Standish Group, "CHAOS 2001: A Recipe for
Success" (2001) Chapter 1
10
What is Project
Management?
Project management is “the application of
knowledge, skills, tools, and techniques to
project activities in order to meet project
requirements” (PMI*, Project Management
Body of Knowledge (PMBOK Guide),
2000, p. 6)
*The Project Management Institute (PMI) is an
international professional society. Their web site is
www.pmi.org.
Chapter 1
11
Figure 12. Project Management
Framework
Chapter 1
12
Project Stakeholders
• Stakeholders are the people involved in or
affected by project activities
• Stakeholders include
–
–
–
–
–
–
the project sponsor and project team
support staff
customers
users
suppliers
opponents to the project
Chapter 1
13
9 Project Management
Knowledge Areas
• Knowledge areas describe the key competencies
that project managers must develop
– 4 core knowledge areas lead to specific project
objectives (scope, time, cost, and quality)
– 4 facilitating knowledge areas are the means through
which the project objectives are achieved (human
resources, communication, risk, and procurement
management
– 1 knowledge area (project integration management)
affects and is affected by all of the other knowledge
areas
Chapter 1
14
Project Management Tools and
Techniques
• Project management tools and techniques assist
project managers and their teams in various
aspects of project management
• Some specific ones include
– Project Charter and WBS (scope)
– Gantt charts, network diagrams, critical path analysis,
critical chain scheduling (time)
– Cost estimates and earned value management (cost)
Chapter 1
15
Sample WBS for Intranet Project
in Chart Form
In t r a n e t P r o je c t
C oncept
W e b S it e
D e s ig n
W e b S it e
D e v e lo p m e n t
D e s ig n U s e r I n t e r f a c e
D e v e lo p P a g e s
a n d L in k s
D e s ig n S e r v e r S e t u p
D e v e lo p
F u n c t i o n a l it y
D e v e lo p S e r v e r
S u p p o rt In fra s tru c tu re
C o n te n t
M ig r a t io n / In t e g r a t io n
R o ll O u t
S u p p o rt
T e s t in g
Chapter 1
16
Figure 14. Sample Gantt Chart
The WBS is on the left, and each task’s start and finish date
are shown on the right using a calendar timescale.
Chapter 1
17
Figure 15. Sample Network Diagram
Each box is a project task from the WBS. Arrows show dependencies
between tasks. The bolded tasks are on the critical path. If any tasks on
the critical path take longer than planned, the whole project will slip
unless something is done.
Chapter 1
18
Sample Earned Value Chart
300
EAC
BAC
250
200
$
BCWS or Cumulative Plan
150
ACWP or Cumulative Actual
BCWP or Cumulative EV
BCWS
Cost Variance
100
ACWP
Schedule Variance
BWCP
50
0
1
2
3
4
5
6
7
8
9
10
11
12
Month
Chapter 1
19
More Advantages of Project
Management*
• Bosses, customers, and other stakeholders do not like
surprises
• Good project management (PM) provides assurance and
reduces risk
• PM provides the tools and environment to plan, monitor,
track, and manage schedules, resources, costs, and quality
• PM provides a history or metrics base for future planning
as well as good documentation
• Project members learn and grow by working in a cross
functional team environment
*Knutson, Joan, PM Network, December 1997, p. 13
Chapter 1
20
How Project Management (PM)
Relates to Other Disciplines
• Much of the knowledge needed to manage
projects is unique to PM
• However, project managers must also have
knowledge and experience in
– general management
– the application area of the project
• Project managers must focus on meeting
specific project objectives
Chapter 1
21
Figure 13. Project Management and Other
Disciplines
Chapter 1
22
History of Project Management
• Modern project management began with the
Manhattan Project, which the U.S. military led to
develop the atomic bomb
• In 1917 Henry Gantt developed the Gantt chart as
a tool for scheduling work in job shops
• In 1958, the Navy developed PERT charts
• In the 1970s, the military began using project
management software, as did the construction
industry
• By the 1990s, virtually every industry was using
some form of project management
Chapter 1
23
The Project Management
Profession
• A 1996 Fortune article called project
management the “number one career
choice”
• Professional societies like the Project
Management Institute (PMI) have grown
tremendously
• Average salaries for project managers
are over $81,000
Chapter 1
24
Project Management Knowledge
Continues to Grow and Mature
• PMI hosted their first research conference in June
2000 in Paris, France
• The PMBOK Guide – 2000 Edition is an ANSI
standard
• PMI’s certification department earned ISO 9000
certification
• Hundreds of new books, articles, and
presentations related to project management have
been written in recent years
Chapter 1
25